209 F. 775 | 8th Cir. | 1913
Lead Opinion
This is a motion to dismiss the appeal of the Century Savings Bank from a decree of a District Court as a court of bankruptcy upon the ground that the exclusive remedy was by petition to revise'. The appeal had been argued, submitted, and decided without suggestion by any one that appellant should have come here,
Passing the matter of practice disclosed by the foregoing, the question presented depends upon the character of the proceeding below from which the appeal was taken. By section 2, p. 7, of the Bankruptcy Act, courts of bankruptcy have jurisdiction to “cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto.” Section 24a gives Circuit Courts of Appeals jurisdiction by appeal of “controversies arising in bankruptcy proceedings.” By 24b they have jurisdiction in equity to superintend and revise in matter of law proceedings in bankruptcy. Section 25a, which also relates to proceedings in bankruptcy or bankruptcy proceedings proper as distinguished from controversies, provides' for appeals to the Circuit Court of Appeals in three classes of cases, the third being “a judgment allowing or rejecting a debt or claim of five hundred dollars or over”; but this case is not of that character.
“The contest in the Otis Case, as In this, was over the claim presented, and, incidentally, to establish a lien upon the bankrupt’s estate.”
In none of the cases, however, has it been held that there cannot be an independent assertion of the lien alone so as to create a controversy appealable under section 24a. Knapp v. Milwaukee Trust Co., 216 U. S. 545, 30 Sup. Ct. 412, 54 L. Ed. 610, and Houghton v. Burden, 228 U. S. 161, 33 Sup. Ct. 491, 57 L. Ed. 780, are examples of controversies over liens. In the former, the trustee first petitioned for the sale of the bankrupt’s property. A mortgagee then intervened
The case has the substantial aspects of an independent controversy. There is a distinct alignment of parties, and pleadings unconnected with the ordinary assertion for allowance of a demand against the estate. The marshaling of liens is a substantive head of equitable jurisdiction. Appellant’s pleading was in substance and form an intervention in equity. The trial court proceeded as in a plenary, independent controversy and called its conclusion a decree. To be sure, the property belonged to the bankrupt and was in the controlof the trus
The motion to dismiss is denied. The request for findings of fact and conclusions of law is also denied; General order 36 does not apply. Knapp v. Milwaukee Trust Co., supra. Th'e order setting aside the decree is vacated.
Concurrence Opinion
I concur in the foregoing opinion, but in doing so attach weight to the fact that this was a controversy as to the proceeds of the homestead and so far as the matters here are concerned involved nothing else. The homestead was exempt under the laws of Iowa. Section 2972, Code of 1897. Under the circumstances, the title to it did not pass to the trustee. Lockwood v. Exchange Bank, 190 U. S. 294, 23 Sup. Ct. 751, 47 L. Ed. 1061; Ingram v. Wilson, 125 Fed. 913, 60 C. C. A. 618; In re Nye, 133 Fed. 33, 66 C. C. A. 139; In re O’Rear, 189 Fed. 888, 111 C. C. A. 150; Gregory v. Bristol, 191 Fed. 31, 111 C. C. A. 89; Huntington v. Baskerville, 192 Fed. 813, 113 C. C. A. 137.
The only jurisdiction the court had in the bankruptcy proceeding-proper was to set apart the- exemptions. True, the homestead was mortgaged with other property which was subject to the bankruptcy proceeding, but the entire property was mortgaged for more than it was worth. The general creditors had no claims against the homestead, and the District Court as a court of bankruptcy had no jurisdiction to take the homestead into its possession because the general creditors had and could have no claims against it. The court of bankruptcy as such therefore had nothing whatever to do with the homestead except to assign or set it off. If the homestead or its proceeds ever further came within the jurisdiction of the District Court, it was not in the bankruptcy case proper, but in a controversy which arose therein.
The opinion of Judge HOOK is exhaustive and is, I think, correct, hut I prefer to put my concurrence chiefly upon the grounds - just stated.